Small Business Optimistic Despite Hurdles

MasterCard released a survey which shows that small business owners feel optimistic about the upcoming year. The annual “Global Small Business Survey” of 4,000 business owners found that nearly one half of all small business owners think they have a lot of personal control to decide the future direction of their business. Small business owners in Mexico are the most likely of any region to say that the current small business climate is more favorable than it was one year ago and will be more favorable a year from now than it is today. Australian small business owners are evenly split on the climate for the upcoming year, while owners in France, the UK and Hong Kong are more pessimistic about their future business climate. Globally, small business owners work an average of 54 hours a week and spend an average of 18 hours a week doing administrative tasks.

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Contactless Support to Hit $870MM by 2011

A new study projects that spending on contactless payments hardware and software will reach $870 million by 2011, at a compound annual growth rate of 27%. London-based ABI Research says that transportation ticketing represents the majority of contactless payment adoption around the world, but that position will be overtaken by adoption of open systems payments within the next few years. ABI says contactless technology in Japan and South Korea is making the greatest headway. In North America, open system payments are driving the contactless adoption. In Europe contactless ticketing systems are also spurring interest in contactless payments. ABI notes that while mobile handsets will develop to enable contactless payments, ongoing debate over how payment applications will be deployed and managed on wireless handsets has delayed the roll-out of mobile handset contactless payments in the US and Europe.

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USAT Picks-Up a $8.4MM Private Placement

PA-based USA Technologies has received a private placement of $8.4 million. As part of the private placement offering, USA Technologies will issue to the investors warrants exercisable into 700,000 additional shares of common stock, at a price of $6.40 per share through December 31, 2011. William Blair & Company, LLC has acted as the exclusive placement agent. USA Technologies is a leader in the networking of wireless non-cash transactions, associated financial/network services and energy management.

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Interactive TV Campaign Launched by Chase

Chase Card Services has launched the first fully interactive television campaign for a financial institution that features long-form video. Chase is using the technology to promote its “Chase Freedom” card product to 12 million DISH Network satellite TV viewers who have interactive capabilities. Viewers will be able to interact with the brand via a click of their remote. The promotion is a collaboration between Chase, advertising agency T3, and The Media Group. Regularly scheduled TV commercials are embedded with a graphic overlay, or trigger, motivating viewers to leave the program they are watching to view a variety of long-form, minute-long videos that creatively demonstrate how to use “Chase Freedom.” Features of the commercials include describing how “Chase” Freedom can play into everyday life and a mechanism that takes viewers to an informational TV microsite to learn and request more information about the credit card. The new card product enables cardholders to change the types of rewards they earn as their needs change.

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Cooney Retires from Versatile Card Technology

Nick Cooney has retired after 17 years as president of Versatile Card Technology. Cooney, 66, aggressively and successfully introduced VCT to Europe, Asia, South America, and the Middle East, strengthening the company’s financial stability and positioning it as the only American-owned high-volume credit card producer with a substantial presence overseas. Cooney plans to travel with his wife, Lisa, and enjoy his children and grandchildren. Versatile Card Technology produces cards for every application and offers complete fulfillment services and turnkey solutions.

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DataWave Systems Approves InComm Acquisition

Canada’s DataWave Systems has approved its proposed acquisition by InComm Holdings for $36 million. InComm expects the merger to close on January 2nd. Atlanta-based InComm recently rolled-out a complete kiosk solution, including installation and setup, cash management, product expertise, support and more. InComm also signed Green Dot to a distribution agreement and Signature Days partnered with InComm to distribute its gift cards nationwide. (CF Library 12/6/06; 12/12/06)

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TNB Card Services Racks Up More Portfolios

Dallas-based TNB has acquired an additional five credit card portfolios from credit unions in MO, MI and TX and now issues cards for credit unions in 19 states. Card portfolios were acquired from Heart ‘O Texas of Waco, Texas; Mountain Star Federal Credit Union of El Paso, Texas; Kensington Valley Community Credit Union of Highland, Michigan; Southpointe Credit Union of St. Louis, Missouri; and Jeffco Credit Union of Festus, Missouri. TNB Card Services, owned and directed by credit unions since 1976, provides electronic payments processing, as well as an agent issuing solution for credit unions nationwide.

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Futuretrust MasterCard and H&R Block Team

The “Futuretrust MasterCard” has partnered with H&R Block to offer a bonus contribution to the cardholder’s “529” college savings plan. Futuretrust(R) is a MasterCard(R)-linked college savings program that enables families and friends to get a “jump” on saving for college. Futuretrust has no membership fee. Rebates are automatically contributed to a tax-advantaged 529 college savings plan of the member’s choice. Mothers Work, Inc. is the world’s largest designer and retailer of maternity apparel, using its custom TrendTrack(TM) merchandise analysis and planning system as well as its quick response replenishment process to “give the customer what she wants, when she wants it.” H&R Block Inc. is a leading provider of tax, financial, mortgage, accounting and business consulting services and products.

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Account Acquisition Costs Hover at $90

A new report has found that the Internet and agent programs produce the lowest cost among all credit card account acquisition channels. While the average across-the-board acquisition cost per active account is now $95, Internet and agent programs deliver accounts at about $20 per active account. CA-based R.K. Hammer also found that agent programs and co-branded programs produce accounts produce the highest activity rates of 70% to 75% compared to an industry average of 63%. Renewal rates among all acquisition channels averaged 83%, but, agent and co-branded programs averaged 75% to 90%. The average break-even period was 31 months across-the-board. Portfolio acquisition was the lowest at 19 months. However, the Internet and agent channels produced a break-even period of 26 months and 23 months, respectively.

ACQUISITION COSTS
Portfolio Acquisition $100
Direct Mail $ 95
Pre-Approved $ 90
Telemarketing $ 75
Pre-App. + Tele $ 70
Internet $ 20
Agent $ 20
Co-branded $ 20
Source: R.K. Hammer

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OTI Tops 130,000 Contactless Readers

On Track Innovations has reached more than 130,000 reader solutions and more than 20 million payment card solutions, including inlays, key fobs and operating system royalties, for the ongoing contactless payments market. OTI’s readers are certified by MasterCard’s “PayPass,” “VISA Contactless”, “Discover Contactless” program; “ExpressPay” from American Express and by the major processors in the U.S. Last month, OTI reported revenues for the third quarter of $8.0 million, a 34% decline over the same period of last year. During the quarter, OTI acquired most of SuperCom’s Assets; demonstrated a contactless reader solution with VeriFone at Cartes; provided USA Technologies next generation contactless payment readers with initial orders for 10,000 readers; signed ‘Yellow’ Convenience Stores to distribute and add loading infrastructure for “EasyPark.” Also, Chevron selected OTI’s “EasyFuel” as its petroleum payment and automated fuel management solution and Garanti Bank of Turkey picked OTI for contactless card solutions. For complete details on OTI’s third quarter performance, visit CardData (www.carddata.com).

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VendTek’s Now Prepay Network Opens in the USA

Canada’s VendTek Systems has established its “Now Prepay” network in the U.S. with the signing of an agreement with ISO The Brennes-Jones Group. The Brennes-Jones Group (BJG) is a Dallas-based employee-owned ISO with Moneris Solutions/Harris Bank in Chicago as its bank sponsor. BJG offers bankcard, T&E, debit, EBT, Pcard and electronic gift and loyalty card processing and check guarantee and authorization. It also offers terminals, wireless communications, IPOS, PC and Internet-based solutions. VendTek develops and licenses automated transaction system software and supporting technologies that improve the efficiency of product delivery, reduce costs to clients and offer superior safety measures.

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First Natl Omaha to Acquire for Discover

Discover inks yet another acquirer. First National Merchant Solutions has agreed to offer it customer Discover card acquiring services. First National Merchant Solutions plans to offer the consolidated processing program to customers in 2007. First National Merchant Solutions is owned by First National Bank of Omaha. Earlier this month Atlanta-based RBS Lynk completed integration and roll-out of direct Discover Network card processing. U.S. Bancorp’s NOVA Information Systems also signed a merchant acquiring agreement to add Discover Network card acceptance. Additionally, Global Payments and TSYS Acquiring Solutions agreed to expand the card’s acceptance. (CF Library 10/10/06; 12/5/06)

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